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June 21, 2016, 3:31 A.M. ET

Asia Markets Edge Up As Brexit Odds At Only 24%

By Shuli Ren

Asia markets cautiously tiptoed higher, even though the latest betting odds place a 76% probability of Britain voting to remain in the European Union.

This is because the Brexit polls remain too close to call. Three new Brexit opinion polls have been released since Monday. The National Center for Social Research polled at 53%/47% in favor of “remain”, while the ORB/Telegraph telephone poll showed a 53%/46% lead in favor of “remain”. However, souring the mood was a YouGov poll which sees a 44%/42% lead for “leave”. While the bookmakers’ odds would suggest Brexit could be a non-event, few want to take risks.

Asia markets had three (somewhat) notable macro events today. First, the June minutes released by the Reserve Bank of Australia shows the Australian central bank is not fixated on stubbornly low inflation rates and started to pivot towards growth rates. The Australian dollar rose 0.4% against the U.S. dollar and is now back to the early June high when the RBA held rates steady.

Second, Japan’s Finance Minister Taro Aso toned down his rhetoric on yen intervention, saying the Japanese government “won’t do it lightly… The G-7 and G-20 have agreed that abrupt moves are not desirable and we aim for stability. We will take action in line with that agreement”, reported Bloomberg. While the has pound soared and the euro has risen since the tragic death of lawmaker Jo Cox, the yen remains stubbornly strong. See my earlier blog “Why Is The Yen Stubbornly High Even As Brexit Risk Fades“.

Third, interestingly, the People’s Bank of China said it may allow onshore banks to trade in the offshore yuan market, another step in the liberalization of the Chinese yuan. While the offshore yuan is free-floating, the onshore yuan has a 2% daily trading band. It is a sign that the PBoC is becoming more confident the offshore yuan won’t go wacky? Currency short-sellers are perhaps too busy to bother with the yuan right now – they may have a chance to attack the pound and the euro later this week!

About Asia Stocks to Watch

Barrons.com’s Asia Stocks to Watch blog analyses news and research from this vibrant and diverse continent, challenges conventional wisdom, and discusses investment ideas from Shanghai to Singapore, and from Indonesia to India.

Shuli Ren has written for Dow Jones Newswires on corporate strategies and Asia markets. Before becoming a journalist, Shuli conducted quantitative equity research at Lehman Brothers, and later Barclays Capital. She was also a consultant for Charles River Associates. She holds a CFA and FRM and studied economics at the University of Chicago’s graduate school.